Tag: Trade & Investment

Great Wind and Solar Potential Boosts Green Hydrogen in Northern Brazil — Global Issues

View of the port of Pecém, in the state of Ceará in northeastern Brazil, with its container yard and the bridge leading to the docks where the ships dock, in the background. Minerals, oil and gas, steel, cement and wind blades are some of the products imported or exported through what is the closest Brazilian port to Europe. CREDIT: Mario Osava/IPS
  • by Mario Osava (fortaleza, brazil)
  • Inter Press Service

FORTALEZA, Brazil, Sep 15 (IPS) – Brazil could become a world leader in the production of green hydrogen, and the northeastern state of Ceará has anticipated this future role by making the port of Pecém, with its export processing zone, a hub for this energy source.

The government of Ceará has already signed 22 memorandums of understanding with companies interested in participating in the so-called “green hydrogen hub,” which promises to attract a flood of investment to the Pecém Industrial and Port Complex.

“If 30 to 50 percent of these projects are effectively implemented, it will be a success and will transform the economy of Ceará,” predicted engineer and administrator Francisco Maia Júnior, secretary of Economic Development and Labor (Sedet) in the government of this state in Brazil’s Northeast region.

The lever will be demand from “countries lacking clean energy,” especially the European Union, pressured by its climate targets and now by reduced supplies of Russian oil and gas, in reaction to Western economic sanctions on Russia for its invasion of Ukraine.

Ceará has special advantages because of its huge wind energy potential, both onshore and offshore, in addition to abundant solar energy.

Hydrogen is produced as a fuel through the process of electrolysis, which consumes a large amount of electricity, and in order for it to be green, the electricity generation must be clean.

The state also has Pecém, a port built in 1995 with an industrial zone and an export zone, which is the closest to Europe of all of Brazil’s Atlantic ports.

Water, the key input from which the hydrogen in oxygen is broken down, will be reused treated wastewater from the metropolitan region of Fortaleza, capital of Ceará, 55 kilometers from the port. “It is cheaper than desalinating seawater,” Maia told IPS in his office at the regional government headquarters.

Fortaleza has the first large-scale desalination plant in Brazil, which is the source of 12 percent of the water consumed in this city of 2.7 million people.

Francisco Maia Júnior, Secretary of Economic Development and Labor of the Ceará state government, sits in his office in Fortaleza, the state capital. He believes that demand from the European Union will fuel the production of green hydrogen in Pecém, an industrial and port complex in this northeastern state of Brazil, which has great clean energy potential to produce it. CREDIT: Sedet Communication
Francisco Maia Júnior, Secretary of Economic Development and Labor of the Ceará state government, sits in his office in Fortaleza, the state capital. He believes that demand from the European Union will fuel the production of green hydrogen in Pecém, an industrial and port complex in this northeastern state of Brazil, which has great clean energy potential to produce it. CREDIT: Sedet Communication

Wind and solar potential

“Ceará is extremely privileged in renewable energies,” electrical engineer Jurandir Picanço Júnior, an experienced energy consultant for the Federation of Industries of Ceará (Fiec) and former president of the state-owned Ceará Energy Company, which was later privatized and acquired by Enel, the Italian electricity consortium, told IPS.

Wind and solar generation potential in the state was double the electricity supply in 2018, according to the Wind and Solar Atlas of Ceará, prepared in 2019 by Fiec together with the governmental Ceará Development Agency and the Brazilian Micro and Small Business Support Service.

Moreover, the two sources complement each other, with wind power growing at night and dropping in the hours around midday, exactly when solar power is most productive, said Picanço at Fiec headquarters, showing superimposed graphs of the daily generation of both sources.

The Northeast is the Brazilian region where wind power plants have multiplied the most, and their supply sometimes exceeds regional consumption. The local winds “are uniform, they do not blow in gusts” that affect other areas in the world where they can be stronger, said Maia. They are also “unidirectional,” said Picanço.

“The International Renewable Energy Agency (Irena) has recognized the Northeast as the most competitive region for green hydrogen,” said Picanço, forecasting Brazil’s leadership in production of the fuel by 2050. “Brazil is still hesitating in this area, but Ceará is not,” he said.

Duna Uribe is commercial director of the Industrial and Port Complex of Pecém, in northeastern Brazil. She studied in the Netherlands and negotiated the participation of the port of Rotterdam as a partner in Pecém, with 30 percent of the capital. CREDIT: Mario Osava/IPS

Having Pecém, a port through which 22 million tons a year pass, and its neighboring special economic zone (SEZ), with benefits such as tax reductions, enhances the competitiveness of Brazil’s hydrogen.

The port will have structures for storing hydrogen in the form of ammonia, which requires very low temperatures, with companies specialized in its transport and electrical installations with plugs for refrigerated containers, all factors that save investments, said Duna Uribe, commercial director of the Pecém Complex.

Link with Rotterdam

In addition, Rotterdam in the Netherlands, Europe’s largest port, has been a partner in Pecém, a state-owned company of Ceará, since 2018, with 30 percent of the shares. That brings credibility and attracts investments to the Brazilian port, Maia said.

This partnership is due in particular to Uribe, a young administrator with a master’s degree in Maritime Economics and Logistics from Erasmus University in the Netherlands, who worked at the Port of Rotterdam.

The complex currently generates about 55,000 direct and indirect jobs, 7,000 of which are in the port, where some 3,000 people work directly in port activities and in companies that operate there.

These wind blades were manufactured in the industrial zone of the Pecém Complex, in northeastern Brazil. Local production of green hydrogen will require a great deal of electricity to be generated by wind and solar plants. CREDIT: Mario Osava/IPS

Pecém was born in 1995 with an initial focus on maritime transportation and two basic projects: a private steel industry to be installed in the SEZ and a state-owned oil refinery, which did not work out.

But the complex has always had an energy vocation, with four thermoelectric power plants, two coal-fired and two natural gas-fired, as well as a wind blade factory and two cement plants.

Social effects

“The port was good because it gave jobs to many people here who used to grow beans, sugarcane, bananas, and today they no longer have land to farm,” Zefinha Bezerra de Souza, 76, who has lived in the town of Pecém since 1961, told IPS.

One of her sons is still fishing. The port did not affect fishing, which is done far out at sea, she said.

One of the first to start working at the port was Terezinha Ferreira da Silva, 54. She started working for the Andrade Gutierrez construction company in 1997, in charge of the port’s initial works, and was later hired by the Complex’s administrator, where she is in charge of receiving documents and is a telephone operator.

Zefinha Bezerra de Souza (right) recognizes the good jobs offered by the Pecém Industrial and Port Complex for the residents of the small town of Pecém. They have stopped growing beans and sugarcane because the land has become more expensive, but the fishermen continue to fish, like her son, married to Marcia da Silva, seated to her left. CREDIT: Mario Osava/IPS

“I was earning very well, I was able to build my house” in the town of Pecém, she said. The town, a few kilometers from the port, had 2,700 inhabitants according to the official 2010 census and twice as many people living in the surrounding rural area.

The “hydrogen hub” will start to become a reality in December, when the private company Energias de Portugal, from that European country, inaugurates a pilot hydrogen plant in the SEZ.

The wealth generated by the hub will initially be concentrated in Pecém, but will then radiate throughout the Northeast, because it will require numerous wind and solar energy plants to be installed in the region’s interior, Uribe told IPS in Fortaleza.

The installation of offshore wind farms is planned, but in the future. This activity has not yet been regulated and there will be a need for power transmission lines and training of technicians, she explained.

Brazil could lead in the production of green hydrogen in a few decades, due to the possibility of generating high volumes of wind and solar energy at low cost and because it has the port of Pecém, with the best conditions for exporting to Europe, according to Jurandir Picanço, energy consultant for the Federation of Industries of Ceará, the northeastern state of the country where it is located. CREDIT: Mario Osava/IPS

Hydrogen culture

Adaptations in local education, with changes at the university, are picking up speed. Since 2018, the state-owned Federal University of Ceará has had a Technological Park (Partec).

A hotel that was built on the university campus to host fans for the 2014 World Cup has been transformed from a white elephant into a green hydrogen research center, said Fernando Nunes, director-president of Partec.

Encouraging practical research and the emergence of new technology companies is one of its tasks, which are gaining new horizons with hydrogen.

It is necessary to train technicians even in the interior, because in the future hydrogen, initially intended for export, will be disseminated in the domestic market, “with mini-plants, when the cost comes down to reasonable levels,” Nunes told IPS.

“Energy will be the redemption of the Northeast, especially Ceará, where we already generate more electricity than we consume,” he said.

The promotion of hydrogen in Ceará is being carried out in a unique way, by a Working Group made up of the state government, represented by Sedet and the Secretariat of Environment, the Federation of Industries, the Federal University and the Pecém Complex.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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Bukele’s Failed Bitcoin Experiment in El Salvador — Global Issues

María del Carmen Aguirre, 52, stands outside her home and pizza business in El Zonte, on the Pacific coast of El Salvador. Her daughters send her remittances from the United States, but they use traditional systems and not the bitcoin electronic wallet, after this country became the first to make bitcoins legal tender on Sept. 7, 2021. CREDIT: Edgardo Ayala/IPS
  • by Edgardo Ayala (san salvador)
  • Inter Press Service

SAN SALVADOR, Sep 07 (IPS) – A year after Salvadoran President Nayib Bukele decided to make El Salvador the first country where bitcoin is legal tender, the experiment has so far failed, as few of the original plan’s objectives have been achieved.

This result was foreseeable since Sept. 7, 2021, when Bukele’s government decided, out of the blue and without any precedent, to make bitcoin legal tender through a law approved by the legislature, controlled by members of the ruling party, Nuevas Ideas.

The aims of that decision were never explained in detail in an official plan, but were basically set out by Bukele, in power since 2019, through his tweets, as well as by officials who merely repeated what the president, given to governing with an authoritarian style, in which he is the only authorized voice for almost everything, has said.

“Unfortunately there is no formal document or official information from the government in which the specific objectives of the measure have been laid out,” economist Tatiana Marroquín told IPS.

But judging by the president’s announcements, and by communications between the government and the International Monetary Fund (IMF), which requested in January 2022 that the measure be annulled, several aims can be highlighted, such as boosting financial inclusion and tourism and improving the country’s “brand”, said Marroquín.

Disenchantment with the Chivo Wallet

The government claimed that bitcoin as legal tender would reduce the gap of unbanked people, which is around 70 percent of the population.

That segment would begin to carry out digital financial transactions with several clicks from their cell phones, according to the government.

However, because much of the information on bitcoin transactions has been classified by the authorities, it is unknown, for example, what percentage of the population is still actively using the Chivo Wallet, the digital wallet created by the government, and in what amounts.

Chivo is basically slang for “cool” in El Salvador.

It is known that at the beginning of the cryptocurrency’s implementation, around four million people downloaded the application, but basically they did so in order to collect a 30 dollar bonus granted by the government to promote the use of bitcoins.

But by this point it is clear that very few people are still using the application, judging by what you hear and see in the towns and cities of this Central American country of 6.7 million people.

“In the end, the majority of the population is not using either the government e-wallet or bitcoins in general,” Marroquin said.

Some businesses use them to receive payments, but there are very few transactions, analyst Ricardo Chavarría, director of Renta Asset Management, a company that manages investment funds in the international market, told IPS.

Nor has the government managed to convince Salvadorans living abroad to use the app to send family remittances to El Salvador, one of its main aims when it dove headfirst into bitcoins.

Each year, the country receives around seven billion dollars in remittances, representing 26 percent of GDP.

In August 2021, a month before the approval of the so-called Bitcoin Law, Bukele said in a tweet that Salvadorans pay around 400 million dollars in commissions to send money to their families in El Salvador.

That amount of money would be saved by sending it through the Chivo Wallet.

One of the Chivo ATMs scattered throughout El Salvador, in an attempt by the government to make it easier for the public to make transactions in bitcoin, the cryptocurrency that is legal tender in El Salvador, but which very few are using a year after its implementation. CREDIT: Edgardo Ayala/IPS

Not even the diaspora trusts the cryptocurrency

However, according to official figures, only 1.5 percent of remittances were sent through e-wallets in the first quarter of 2022, a percentage far below what the government expected.

This was probably influenced by the high volatility of cryptoassets such as bitcoin, which is currently going through a crisis in its value, dubbed as a crypto winter.

Bitcoin’s price plunged to 19,813 dollars at the close on Sept. 5, well below last year’s peak, when it surpassed the 60,000 dollar mark.

And the Salvadoran population abroad, especially in the United States, where more than three million live, is reluctant to bet on something so volatile and, therefore, risky.

“People are extremely careful, despite the political capital of the president (Bukele), the same people over there (Salvadorans in the United States) do not risk their money,” said Chavarría.

That is the case of María del Carmen Aguirre, a 52-year-old entrepreneur who runs a small pizza business in El Zonte, a coastal community on El Salvador’s Pacific coast, some 50 kilometers southeast of San Salvador, part of the municipality of Chiltiupán, in the central department of La Libertad.

Aguirre told IPS that she regularly receives remittances from her two daughters who live in the United States, in San Francisco, California, but neither of them send the money through Chivo Wallet or any other similar platform.

“They send it only through the bank. It seems that they are quite afraid. ‘What happens if we send 200 dollars and at that moment the price of bitcoin goes down?’ they say to me,” said Aguirre, in her pizzeria.

El Zonte is a beach area known for its surfing and because an unusual community effort to use the cryptocurrency was launched there, about two years before the government decided to try bitcoins.

This initiative was promoted thanks to a donor, who remains anonymous, who gave money to carry out works in the town, but on the condition that those who worked on them would be paid in bitcoins and not in dollars, the legal tender in El Salvador since 2001.

That still raises suspicions: why would anyone be interested in promoting the crypto-asset in a poor coastal town, with dirt roads and modest shacks, although there are also some luxury hotels, hostels and restaurants.

During the COVID-19 pandemic, families in El Zonte received, on several occasions, 30-dollar vouchers from the mystery donor to use for bitcoin transactions.

“They gave us the bonus three or four times so we could go to the stores that already handled bitcoin,” Aguirre said.

Chavarría said the cryptocurrency is probably at the end of the so-called crypto winter, and he expects it to rise again in the future.

“For me, in a medium to long term horizon it is going to recover and it is going to win out,” he argued.

A street corner in the town of El Zonte, on the Pacific coast of El Salvador, which became the place where a project to promote the use of bitcoins in the country started, before the government of Nayib Bukele gave the cryptocurrency legal status in September 2021. Most businesses in this town accept them as a form of payment, but in the rest of the country the use of bitcoins is marginal. CREDIT: Edgardo Ayala/IPS

Not just gangs

One thing that Marroquín the economist and financial analyst Chavarría agreed on is that, with the passage of the Bitcoin Law, El Salvador made the global headlines about something other than the recurring issue of gang violence, which used to be the only issue of interest to the international press.

In this sense, it could be argued that the country’s image improved somewhat on the world news agenda.

“The fact that El Salvador is on the news map and that it appears in Bloomberg, in The New York Times, in Spain’s El País, when the only topic before was the gangs, is good news for me as a Salvadoran,” said Chavarría.

Marroquín concurred that “El Salvador is undoubtedly no longer known as it used to be solely for violence.”

She added that the adoption of the bitcoin has also bolstered tourism in the country by attracting a segment of visitors interested in the cryptocurrency, although it remains to be seen whether this improvement will have an impact on poor communities near tourist spots.

The bitcoin symbol can be seen everywhere in El Zonte, a coastal community in southern El Salvador, such as on this 1970s Volkswagen van or ‘furgoneta’, called the Bitcoineta. The implementation of the cryptocurrency in this country has not gone well and so far has been a setback for President Nayib Bukele, although the outlook could change if the price of the cryptoasset rallies. CREDIT: Edgardo Ayala/IPS

A cloak of secrecy

The government has been harshly criticized for the secrecy with which it has handled not only the adoption of the bitcoin but also other important issues about which the public has demanded information, since they have involved the use of public funds for which the Bukele administration has not been held accountable.

When it has been made available, Information has arrived in dribs and drabs.

It is known that the government has purchased 2,381 bitcoins, on which it has spent 106.04 million dollars. But when related investments are factored in, such as the ATMs placed at various points around the country, the total investment exceeds 300 million dollars.

“There is a big black cloak surrounding the government’s use of public funds,” Marroquín said.

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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A Nod Towards Capitalism in Venezuela — Global Issues

A partial view of the city of Punto Fijo, with the Cardón refinery in the background, on the Paraguaná peninsula, projected as a special economic zone overlooking the Caribbean in northwest Venezuela. CREDIT: Megaconstrucciones
  • by Humberto Marquez (caracas)
  • Inter Press Service

CARACAS, Sep 03 (IPS) – Venezuela is preparing to replicate the experience of Special Economic Zones (SEZs), a mechanism with which more than 60 countries have tried to draw investment and accelerate economic growth, while under its avowedly socialist government a “silent neoliberalism” is gaining ground.

The aim of the SEZs is “to provide special conditions to gain the economic confidence of investors from all over the world, and productive development to put an end once and for all to oil rentism,” said President Nicolás Maduro when he promulgated the Organic Law of Special Economic Zones on Jul. 20.

The SEZs, “90 percent of which are in the global developing South, are a catalyst for economic restructuring processes and go hand in hand with the expansion of the neoliberal economy,” sociologist Emiliano Terán, a researcher with the non-governmental Venezuelan Observatory of Political Ecology, told IPS.

According to the United Nations Conference on Trade and Development (Unctad), there were 5,383 SEZs in the world in 2019 and another 508 under construction, of which 4,772 were in developing countries – 2,543 in China alone and 737 in Southeast Asia.

In Latin America and the Caribbean there were 486 – 73 in the Dominican Republic, some 150 in Central America, seven in Mexico and 39 in Colombia.

SEZs are mainly commercial, such as free ports or free trade zones, where import quotas, tariffs, customs or sales taxes are eliminated; industrial, with an emphasis on improving infrastructure available to companies; urban or mining ventures; or export processing.

Their main characteristic is that, in order to stimulate investment, especially foreign investment, there are more flexible regulations on taxes, investment requirements, employment, paperwork and procedures, access to resources and inputs, export quotas and capital repatriation.

One of the camping areas improvised by tour operators on La Tortuga, an island with no permanent population where tourist developments are being planned that are triggering environmentalist alarms, as they may severely affect the still almost pristine ecosystem of the island and its surrounding Caribbean waters. CREDIT: Jorge Muñoz/Aleteia

An eye on the environment

In Venezuela, the first five zones decreed are the arid Paraguaná Peninsula, in the northwest; Margarita Island, in the southeastern Caribbean; La Guaira and Puerto Cabello, which are the largest ports, along the central portion of the Caribbean coast; and the remote La Tortuga Island, some 200 kilometers northeast of Caracas.

Paraguaná (an area of 3,400 square kilometers) is home to a large oil refining complex, and Margarita Island (1,020 square kilometers) has for decades been a sales tax-free zone and a tourist mecca for Venezuela’s middle class.

Puerto Cabello and La Guaira are essentially ports for imports to the populated north-central part of the country, whose main exports, oil and metals, are shipped from docks in the production areas in the east and west.

Hotel complexes, airports, marinas and golf courses are being planned for La Tortuga, which covers 156 square kilometers and has no permanent population. Environmental groups warn that its waters, reefs and the island itself are home to five species of turtles, 73 species of birds and dozens of species of fish and cetaceans.

Sociologist Emiliano Terán (R) with economists Luis Crespo (C) and Carlos Lazo (L) take part in a forum at the Central University of Venezuela critical of the announced special economic zones. CREDIT: Humberto Márquez/IPS

Limited economy

“The environmental issue is a concern, but it is hard to believe that the government has the resources or the investors for the number of hotels planned for La Tortuga,” economist Luis Oliveros, a professor at the Metropolitan and Central Universities of Venezuela, told IPS.

The decreed Venezuelan SEZs “seem more like announcements than realities, and although we like the government to think of growth and development hand in hand with private investment, much more is needed. It has yet to be clarified what exactly the government is pursuing with these zones,” Oliveros said.

In Venezuela “creating SEZs has limitations, such as the sanctions (imposed by the United States and the European Union) and the need to generate macroeconomic stability and legal certainty, which are pending issues,” he added.

After seven years of sharp decline – and three years of hyperinflation – Venezuela’s annual gross domestic product, which exceeded 300 billion dollars a decade ago, now stands between 50 and 60 billion dollars, according to economists.

Oil production, the main lever of the economy and source of tax revenues, has shrunk and is starved of new investments, while the State desperately seeks income by exporting crude oil at a discount or selling gold that is extracted at the cost of great environmental damage in the southeast of the country.

Attracting investment may be an uphill struggle for SEZs that have still not been fully mapped out, considering that, for example, major companies have not knocked on the door to raise oil production – 600,000 barrels per day when a decade ago it was three million – despite the favorable signals sent by the United States.

Since March, informal contacts between Washington and Caracas, prompted by the impact of the war in Ukraine on the world energy market, have explored, without success so far, easing sanctions and other measures to bring Venezuela back to the U.S. oil market with new investments.

Juan Griego Bay in the north of Margarita Island, already half a century old as a sales tax-free zone and tourist mecca for Venezuela’s middle class, is now one of the country’s five special economic zones. CREDIT: Mipci

Neoliberal plan

In the southeast of the country, an area rich in gold, iron, diamonds, coltan and other minerals, the 112,000 square kilometer Orinoco Mining Arc (larger than Bulgaria, Cuba or Portugal) was decreed in 2016 as a “strategic development zone”, and its control and management was handed over to the armed forces.

The Mining Arc “has been a precedent for a new model promoted by the State to attract investments, but with depredation of the environment and restriction of wages and workers’ rights,” warned Luis Crespo, professor of Economics at the Central University of Venezuela, during a forum at that university.

“The special economic zones are part of a silent neoliberal adjustment plan driven forward by the government of President Maduro,” said Crespo.

The Venezuelan SEZ law – enacted by the legislature, which has been boycotted by most of the political opposition – states that its purpose is to develop a new production model, promote domestic and foreign economic activity, and diversify and increase exports.

It also aims to promote innovation, industry and technology transfer, create jobs and “ensure the environmental sustainability of production processes.”

The terminology about socialism or transition to socialism, frequent in the political discourse of the government and the ruling United Socialist Party, is absent from the legislation of the SEZs and from the repeated calls for private capital.

“The example of China is being followed, as it is by other countries, in using the SEZs as a showcase for heterodox forms of capital accumulation, in a process of progressive neoliberalization of the economy, as the oil model of production and distribution of wealth is being exhausted,” Terán said.

He added that “the SEZs cannot be seen only in terms of macroeconomic indicators,” as they become “zones of social and environmental sacrifice, with a new political geography of dispossession, and with the cheapening of labor, especially that of women workers.”

According to UNCTAD, although there are differences in SEZs from one country to another and within countries, their common features include having a clearly defined geographic area, a regulatory regime that is distinct from the rest of the economy, and special infrastructure support for the development of their activities.

A view of the border crossing between Colombia and Venezuela over the Simón Bolívar Bridge (in southwest Venezuela and northeast Colombia), when there was free transit and intense activity before the border was closed and relations between the two countries broke down. Now Caracas proposes to create a binational special economic zone in the area. CREDIT: Humberto Márquez/IPS

More politics

Venezuela’s SEZs will be guided by a council to be freely appointed by the president, each will have a single authority to be named by the president, and the decree establishing one of the zones must be considered by the legislature within 10 working days or it will be approved, without discussion.

Areas such as the SEZs, the Mining Arc or special military zones in practice modify the political-administrative division of the country, which only in theory is a federal republic with 23 states plus a capital district.

In another political move, on Aug. 23 Maduro publicly proposed to his new Colombian counterpart, leftwing President Gustavo Petro, who took office on Aug. 7, the creation of a special binational economic zone between southwestern Venezuela and northeastern Colombia.

“We are going to propose to President Petro the construction of a large economic, commercial and productive zone between the department of Norte de Santander (Colombia) and the state of Táchira (Venezuela),” Maduro said.

Diplomatic, political, commercial and transit relations between the neighboring countries have been severed since February 2019.

In Táchira, business spokespersons have expressed their support for this Andean state of 11,000 square kilometers to obtain special regimes that favor trade with the neighboring country, and their peers in Colombia are betting on a recovery of bilateral trade, which prospered until the first decade of this century.

Terán described the projected creation of the SEZs as a possible “new pact of elites in Venezuela,” after more than 20 years of acute political confrontation, but warned that “there is an alternative, because although fragmented, dispersed and with a new look, protests against these pacts have never ceased.”

© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service

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Transforming Girls Education, Changing The World — Global Issues

Helen Grant
  • Opinion by Yasmine Sherif, Helen Grant (new york)
  • Inter Press Service
Helen Grant

Despite the progress made in recent decades, gender inequality between girls and boys, in all their diversity, is deepening. According to a recent United Nations report, the interlinked crises: of armed conflicts, climate change and COVID-19 are putting the 2030 Agenda in “grave danger, along with humanity’s very own survival.” These multiplying challenges are “creating spin-off impacts on food and nutrition, health, education, the environment, and peace and security, and affecting all the Sustainable Development Goals.”

The COVID-19 pandemic has deepened the global learning crisis. Approximately 147 million children missed over half of in-person learning in 2020 and 2021 and it is estimated that 50% of refugee girls in secondary school may not return, when their classrooms reopen after COVID-19, whilst 222 million girls were not able to be reached by remote learning during the pandemic.

Shocking new estimates published by Education Cannot Wait (ECW) indicate that 222 million school-aged children caught in crises globally are in urgent need of access to a quality education. These include 78.2 million who are out of school – a majority (54%) of whom are girls – and 119.6 million who are in school but not achieving minimum competencies in mathematics or reading.

Yasmine Sherif

Girls impacted by the horrors of war and displacement in places like the Democratic Republic of the Congo, Ethiopia, Mali, Nigeria, Pakistan, Somalia, South Sudan, Sudan, Ukraine and Yemen face even greater risks, such as gender-based violence, early child-marriage and unwanted pregnancies.

The banning of secondary girls’ education in Afghanistan is especially intolerable. In the past year, girls were estimated to be more than twice as likely to be out of school, and nearly twice as likely to be going to bed hungry compared to boys.

This is the global picture as we approach, Transforming Education Summit, and why it is such a critical moment for girls education around the world.

ECW’s Case for Investment

ECW’s new Case for Investment is our case for humanity. It speaks up for girls’ rights to a 12-year education everywhere, not least in contexts of humanitarian crisis. It is our collective responsibility to deliver on the promise of 222 Million Dreams and the Sustainable Development Goals.

According to ECW’s recent Annual Results Report, conflict, forced displacement, climate-induced disasters and the compounding effect of the COVID-19 pandemic fueled increased education in emergencies needs with funding appeals reaching US$2.9 billion in 2021, compared with US$1.4 billion in 2020. While 2021 saw a record-high US$645 million in education appeal funding – the overall funding gap spiked by 17%, from 60% in 2020 to 77% in 2021.

Financing for education has not aligned with the deepening and growing needs. The gap has only widened.

It is only by closing this gap that we protect girls, support gender equality and empower the next generation of female leaders, teachers, lawyers, doctors and nurses.

Investing in 50% of a country’s population, its girls, is the best investment we can make. For every dollar invested in girls’ education, we see $2.80 in return. And a World Bank study estimates that the “limited educational opportunities for girls, and barriers to completing 12 years of education, cost countries between $15 and $30 trillion in lost lifetime productivity and earnings.”

The United Kingdom is a leading donor to Education Cannot Wait, and its support has allowed Education Cannot Wait and its strategic partners to have reached close to 7 million children and adolescents since 2016. In 2021 alone, the Fund reached 3.7 million children across 32 countries and an additional 11.8 million through COVID-19 interventions. Of all children reached by ECW’s investments to date, over 48% are girls, and 92% of programmes demonstrated an improvement in gender parity.

The Transforming Education Summit, and this year’s UN General Assembly will be a critical moment to address these challenges, and to assess the efficiency, effectiveness, scalability, sustainability and overall return-on-investment of ongoing and new initiatives and works streams as we look to increase girls access to quality education.

Delivering on Our Promise

Hosted by Switzerland and Education Cannot Wait – and co-convened by Germany, Niger, Norway and South Sudan – ECW’s 2023 High-Level Financing Conference offers an opportunity for leaders to turn these commitments into action.

We urge people everywhere to show their support for #222MillionDreams and #Everygirleverywhere with posts on social, individual donations, letters to your elected officials and calls to actions through the broad group of strategic partners.

Now is our chance to deliver on our promise of universal, equitable education. Now is our chance to transform girls’ education to transform the world. Now is our chance to deliver with humanity and for humanity.

About the Authors

Helen Grant is a Member of UK Parliament and the United Kingdom’s Special Envoy for Girls’ Education, leading the UK’s efforts internationally to ensure all girls get 12 years of quality education. Prior to politics, Helen was a children and family lawyer for 23 years.

Yasmine Sherif is the Director of Education Cannot Wait (ECW), the United Nations global fund for education in emergencies and protracted crises. A lawyer specialized in International Humanitarian Law and Human Rights Law (LL.M), she has over 30 years of experience with the United Nations and international NGOs.

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Shaping Our Digital Future — Global Issues

  • Opinion by Armida Salsiah Alisjahbana (bangkok, thailand)
  • Inter Press Service

BANGKOK, Thailand, Aug 30 (IPS) – Asia and the Pacific is the most digitally divided region of the world, and South-East Asia is the most divided subregion. The Covid-19 pandemic detonated a “digital big bang” that spurred people, governments and businesses to become “digital by default;” a sea change that generated vast digital dividends. These benefits that have not been distributed equally, however. New development gaps have emerged as digital transformation reinforces a vicious cycle of socioeconomic inequalities, within and across countries.

Armida Salsiah AlisjahbanaBridging these divides and ensuring advances in technology can benefit everyone will be a key challenge as the region seeks to achieve a more inclusive and sustainable post-pandemic recovery. A new ESCAP report, Asia-Pacific Digital Transformation Report 2022: Shaping our digital future, identifies five key “digital divides;” fault lines that separate those who can readily take advantage of new technology from those more likely to be left behind. These divides are related to age, gender, education, disability and geography.

Typically, those most comfortable with technological innovation are younger and better educated people who have grown up with the Internet as ”digital natives”. Older persons may be more distrustful, or slower to acquire the necessary skills or suffer declines in aptitude. But at any age, poor communities – especially those in rural areas – are most at risk as they may be unable to afford electricity or digital connections or lack the relevant skills, even if the necessary infrastructure and connectivity are there.

The most significant driver of digital transformation is business research and its development and adoption of frontier technologies. Another major component is e-government; the delivery of public information and services via the Internet or through other digital means. This has the potential for more efficient and inclusive operations; especially when linked to national digital ID systems. However, because e-government services often evolve in complex regulatory environments, providing appropriate levels of accessibility for older generations, the disabled, or those with limited education has become more challenging.

It is clear that digital technologies are enabling the delivery of previously unimagined services while enhancing productivity and optimizing resource use that helped reduce emissions of greenhouse gases and pollutants. These technologies also helped track and contain pandemic spread. Social networks are fostering and diversifying communications among people of all ages sharing common interests, irrespective of location. This helps them stay in touch, broaden their experiences, continue education or deepen subject knowledge. This provided a veritable lifeline that has continued as we enter the post-pandemic era.

At the same time, the risks have also proliferated. Social networks also created social ”echo chambers” and generated torrents of misinformation and hate speech. New cryptocurrencies have opened the way to speculative financial bubbles, while cybercrime increased alarmingly as it assumed prolific variations. In addition, digital gadgets and the Internet are thought to contribute to more than 2 per cent of the global carbon footprint. The manufacture of electronic hardware can also exhaust supplies of natural resources such as rare-earth elements and precious metals like cobalt and lithium.

Moreover, digital transformation has led to the creation of an immense amount of digital data which become an essential resource to understand digital transformation. However, it raises concerns about the ethical and responsible use of data for privacy protection. A common understanding among countries on the operationalization of such principles has yet to evolve.

The Asia-Pacific Digital Transformation Report 2022 highlights the importance of digital connectivity infrastructure as “meta-infrastructure.” 5G and other high-speed networks can make all other infrastructure – such as transport and power grid distribution – much smarter, optimizing resource use for sustainable development. To contribute to these needs, the Report recommends three pathways for action, which are not mutually exclusive and are aligned with the ESCAP Action Plan of the Asia-Pacific Information Superhighway initiative for 2022-2026.

The first pathway focuses on the supply side and provides relevant policy practices for the development of cost-effective network infrastructure. The second addresses the demand side and recommends capacity-building programmes and policies to promote uptake at scale, of new, more affordable and accessible digital products and services. The third involves improving systems and institutions that are related to collecting, aggregating and analysing data in a way that builds public trust and deepens policymakers’ understanding of the drivers of digital transformations.

Finally, in a world where digital data can flash around the globe in an instant, the report highlights the importance of regional and global cooperation. Only by working together can countries ensure that these technological breakthroughs will benefit everyone; their peoples, economies and societies, as well as for the natural environment, in our new “digital by default” normal.

Armida Salsiah Alisjahbana is an Under-Secretary-General of the United Nations and Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP)

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A World in Crisis Needs Both Trade and Aid — Global Issues

  • Opinion by Ngozi Okonjo-Iweala – Rebeca Grynspan – Pamela Coke-Hamilton (geneva)
  • Inter Press Service

GENEVA, Aug 16 (IPS) – We are in the toughest period the world economy has faced since the creation of the multilateral system more than three-quarters of a century ago. A quadruple shock of COVID, climate change, conflict and cost-of-living has undone years of hard-fought development gains.

As financial conditions tighten, even countries that had seemed on track to prosperity and stability now stare into the abyss of debt distress, fragility and uncertainty about the future.

Coordinated, multilateral action is necessary to tackle the crises we face. Both aid and trade have key roles to play in reversing the impacts of this quadruple shock and putting the world back on track to achieve the Sustainable Development Goals.

We head the three international agencies that comprise the Geneva trade hub – the World Trade Organization (WTO), UN Conference on Trade and Development (UNCTAD) and the International Trade Centre (ITC).

The WTO makes and monitors the rules for global trade. UNCTAD delivers research and consensus-building to guide governments. ITC helps small business go global, especially firms led by women and young entrepreneurs. We work together so that trade works better for development.

All three of us share a deep commitment to trade-led prosperity. All three of us understand that a world in crisis means no more business as usual. And all three of us want our organizations to “walk the talk” on making aid and trade deliver for real people.

To guide aid and trade towards a better world, policymakers need to pivot in three fundamental ways.

First, make trade greener. Global trade can play an important role in a transition to a low-carbon economy. Preliminary research at the WTO suggests that removing tariffs and regulatory trade barriers for a set of energy-related environmental goods would reduce global CO2 emissions by 0.6% in 2030 just from improved energy efficiency, with additional potential gains from innovation spillovers and as lower prices accelerate the shift towards renewable energy and less carbon-intensive products.

Second, make trade more inclusive. Promoting greater trade by small businesses and greater participation by women and youth make companies and countries more competitive, drives economic transformation and reduces poverty.

Yet ITC business surveys found that one only out of every five exporting companies is women-led. WTO data show that micro, small and medium-sized firms represent around 95 percent of all companies globally but only one-third of total exports.

Third, make trade more connected. In our networked world, the future of trade is through digital channels and platforms, especially for small businesses. During the pandemic, we saw how doing business online went from being useful to critical for survival. UNCTAD data shows that digitally delivered services reached almost two-thirds the level of global services exports.

These themes were discussed at the Global Review of Aid-for-Trade, which took place 27-29th July in Geneva.

The event took place one month after the WTO’s successful Twelfth Ministerial Conference, which put trade multilateralism back on track and delivered a landmark agreement on fisheries subsidies, and two months before the COP27 meeting in Egypt (November 6-18) that could determine the world’s chances to keep the 1.5C target alive.

The data shows promising signs that aid-for-trade is tilting towards greater sustainability, inclusivity and connectivity. OECD and WTO data reveal a record high of nearly US$50 billion in aid for trade disbursements in 2020, of which half were either climate or gender related, and one-third supported the digital economy.

Despite growing budgetary pressures at home, it is critically important to continue and increase these aid-for-trade flows.

Apart from a stronger thematic focus on sustainability, inclusivity and connectivity, maximizing the contribution of aid for trade to achieving the Sustainable Development Goals requires a resolute focus on the “where” and “how” of delivering development results.

This means a focus on those countries whose trade and development needs are highest – particularly Least Developed Countries and fragile/conflict-affected countries – and regional initiatives like African Continental Free Trade Area, to ensure they become stepping-stones to wider and more inclusive regional value chains and trade-led growth.

It means partnership across international organizations. The WTO, UNCTAD, and ITC already collaborate on initiatives like the Global Trade Helpdesk, which simplifies market research by bringing key trade and business information into a single portal, as well as on support to cotton-exporting countries in Africa.

Last but certainly not least, it means mobilizing public and private finance. The IFC estimates a worldwide US$300 billion financing gap for women, and the global trade finance gap has nearly doubled from an already-staggering $1.5 trillion. Without access to finance, firms cannot grow, diversify or formalize.

We want to end with a call to action. Creating a more sustainable, inclusive and connected future is the moon shot of our times. Aid, trade and multilateralism – working together – are part of the solution.

It is normal and understandable that governments act to shore up their own economies in troubled times. But we must act now to ensure that the world’s poorest and most vulnerable can still see a pathway to prosperity through global trade.

The joint opinion piece is authored by Ngozi Okonjo-Iweala, Director-General, World Trade Organization, Rebeca Grynspan, Secretary-General, UN Conference on Trade and Development, and Pamela Coke-Hamilton, Executive Director, International Trade Centre.

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Frugal Innovation is Key to Advancing the UNs Global Goal for Education — Global Issues

  • Opinion by Jaideep Prabhu (cambridge, uk)
  • Inter Press Service

CAMBRIDGE, UK, Aug 02 (IPS) – The world needs tens of millions of new teachers by 2030, according to UNESCO – an order of magnitude that requires “frugal innovation.” I’ve studied frugal innovation for more than a decade, and it holds a vital key to this global challenge. A model created by BRAC in Bangladesh deserves special attention in this worldwide pursuit.

Frugal innovation is not innovation on the cheap. Rather it’s innovation that is designed from the outset to be affordable, scalable – and better performing than traditional models. That’s why it’s so important to achieving UN Sustainable Development Goal 4, which is to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.”

That goal requires that education be both universally available and able to meet quality standards. It must, therefore, be affordable, or it won’t be scalable globally.

I co-authored an early book on frugal innovation in emerging markets 10 years ago, titled Jugaad Innovation: Think Frugal, Be Flexible, Generate Breakthrough Growth. It focuses on the private sector in emerging markets like India, China, and Bangladesh. Its thesis is that in such markets, innovation – the creation of new products and services – needs to be very different from innovation in the West, where it is synonymous with high technology, typically expensive and highly structured, and often elitist. In contrast, we argued that to reach large numbers of people on low incomes in informal economies of emerging markets, firms need products and services that are affordable and an approach that is frugal, flexible, and inclusive.

At that time, I was introduced for the first time to the founder of BRAC, Sir Fazle Hasan Abed, and many other inspiring people at BRAC. From them I learned that the ideas we had written about in 2012 had been discovered and perfected by BRAC over four decades, and not for private profit but for social impact instead.

When BRAC started its work in education in 1985, poverty was widespread in Bangladesh. Forty percent of Bangladesh’s primary-aged children were not in school, and only 30 percent went on to complete primary education.

At that time, like elsewhere in the world, delivering education at scale in Bangladesh prioritized developing new infrastructure: building schools and hiring credentialed teachers to meet the demand. But building new schools in every community was impossible, and highly trained teachers were scarce.

Many children could not arrange to travel the distance to school because it was too far or unsafe – or they were needed at home during harvests. Children in ethnic minority groups faced additional obstacles, as did those with disabilities. Most teachers were men, which made parents unwilling to send young girls to school.

The key to BRAC’s approach to providing education at scale was not new infrastructure, but a new mindset. Indeed, the hallmarks of the BRAC approach were more or less exactly those we had written about in our book Jugaad Innovation: it was all about being frugal, flexible and inclusive. It was all about lateral thinking and working backwards from a deep understanding of the problem as faced by the people in the communities being served. And it was all about empowering those communities to be part of the solution.

BRAC’s eventual solution was ingenious. Instead of requiring students to go to distant schools, with all the related burdens and costs, BRAC brought schools to the students.

Instead of building expensive school infrastructure, BRAC took already existing infrastructure. It stitched together an extensive system of rented one-room schools in almost every community.

Instead of taking urban trained teachers, it trained local women to teach grades one through five, with up to 30 children maximum per classroom, instead of 50 to 60. Training non-formal women teachers from within the communities made scaling possible.

The outcomes were impressive. Almost 100 percent of students completed fifth grade, and BRAC students consistently did better than public school students on government tests. At its peak, this network consisted of 64,000 schools, and it has graduated 14 million students, mostly at the pre-primary and primary levels.

That is frugal innovation at its best: affordable, scalable, and better. It is community-based and locally led.

It is transformational on many levels: the number of children educated; the number of girls educated; the number of communities with schools; the number of women trained as teachers; the pipeline of students prepared for ongoing education.

Making significant progress toward achieving SDG 4 will require that kind of frugal innovation. BRAC is pointing the way.

The author is the Jawaharlal Nehru Professor of Business and Enterprise at the Judge Business School at the University of Cambridge in England.

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the Story of Sir Fazle Hasan Abed and BRAC — Global Issues

Sir Fazle Hasan Abed, the founder of BRAC and “one of the unsung heroes of modern times,” according to Nicholas Kristof of The New York Times, authorized his own biography before dying of brain cancer in 2019. Author Scott MacMillan wrote Hope Over Fate based on hundreds of hours of interviews with Abed and his friends, family and co-workers. Credit: courtesy of BRAC
  • Opinion by Scott MacMillan (redding conn, usa)
  • Inter Press Service

Redding Conn, USA, Aug 01 (IPS) – About seven years ago, I started working on a project with Sir Fazle Hasan Abed, the founder of BRAC. It was originally supposed to be a memoir: the story of Abed, the mild-mannered accountant who would rid the world of poverty, as told by the man himself.

I was privileged to be Abed’s speechwriter for the last several years of his life, and I would sit for hours listening to stories from his remarkable life: of his boyhood in British India, his love life in London in the 1960s, his three marriages, and how, in 1972, with a few thousand pounds from the sale of his flat in Camden, he launched a small nonprofit organization to aid refugees, originally called the Bangladesh Rehabilitation Assistance Committee. Many people would go on to call BRAC, which Abed led until his death in 2019, the world’s most effective anti-poverty organization.

That seemed like a story worth telling in full, and after some coaxing, Abed gave me permission to begin ghostwriting his autobiography. He was an exceptionally private person, however, and cringed at anything with a whiff of self-promotion. “You have me pontificating!” he once scolded me after an early draft of one speech.

I was about halfway done with his memoir when he told me to stop. The story, as I had written it, did not feel right coming from him. He much preferred to let BRAC’s work speak for itself—which may explain why so few people outside his native Bangladesh knew who he was or the magnitude of what he had accomplished.

Abed eventually came around to the idea that his story needed to be told by someone, even if it would not ultimately be him. He asked that I use the material I had gathered to write the book myself, in my own words—which I did, even knowing that many of those words would fall short of the task. The book, Hope Over Fate: Fazle Hasan Abed and the Science of Ending Global Poverty, is released today by Rowman & Littlefield.

An accountant’s story

Abed told stories, but he was not a good storyteller in the typical sense. He did not sprinkle his speeches with anecdotes of the “ordinary” people he had met, as politicians sometimes do. He was an accountant, and for him, numbers told stories.

So here is the story he would tell of his native Bangladesh—no names or faces, just a chorus of statistics. At the moment of its independence in 1971, Bangladesh was the world’s second-poorest country, with a per capita GDP of less than $100, a nation of sixty-six million living on a patch of flood-prone land the size of Iowa. One in four children died before their fifth birthday. As late as 1990, the country still had one of the highest maternal mortality rates, at 574 per 100,000.

Sir Fazle Hasan Abed in his later years, visiting a BRAC school. Credit: courtesy of BRAC

In the 1990s, however, things began to change, rapidly and almost miraculously. Quality of life improved at a historically unprecedented rate. By 2013, under-five mortality had plummeted to just 40 per 1,000 live birthdays; maternal mortality had dropped similarly. These and other changes constituted “some of the biggest gains in the basic condition of people’s lives ever seen anywhere,” according to The Economist.

People standing up for themselves

What happened? Abed’s work had much to do with it. BRAC trained and mobilized people, giving them a sense of self-worth that many had never felt before. They began standing up for themselves against landlords, corrupt government officials, and imams opposed to women’s rights. Often, he found what people really needed was hope—a sense that, with a modicum of outside help, their fate could be in their own hands.

His methods were varied and novel. Incentive-based training gave health information to mothers so they could save their own children’s lives. Women took small loans from BRAC to buy cows and handlooms, the first time they had owned anything of substance. Since they had nowhere to sell the milk and fabric they produced, Abed built up the dairy and textile industries by launching enterprises that bought the women’s goods. These enterprises, owned by BRAC, turned out to be profitable, so he plowed the money back into the poverty programs. Abed also launched fifty thousand schools, plus a commercial bank and a university. BRAC now likely reaches more than one hundred million people in about a dozen countries in Africa and Asia. No other nonprofit or social enterprise has reached such scale.

Yet Abed was no ascetic, self-abnegating Gandhi. He left the office at a reasonable hour and enjoyed coming home to the comforts of domestic life, to the sound of family and the warm smell of spices from the kitchen. Twice a widower, he told me of his loneliness between his marriages, and how, despite his preoccupation with work, he found it hard to return to an empty house.

The science of hope

How, then, did he do it? Remarkably, Abed would sometimes say that BRAC had done relatively little to help Bangladesh rise from the ranks of one of the poorest nations on earth. It merely created the enabling conditions: it was the poor themselves, especially women, who worked tirelessly, once those conditions were in place, to change the conditions of their lives.

I suspect this is why he thought his own story did not deserve so much attention, especially compared to the millions of women who had long labored on the fringes of society, who would one day, in his words, “be their own actors in history, and write their own stories of triumph over adversity.”

So this is the biography of a man, yes, but it is also the biography of an idea—the idea that hope itself has the power to overcome poverty. Near the end of his life, Abed spoke of “the science of hope”—the study and practice of giving people a sense of control over their own lives. “For too long, people thought poverty was something ordained by a higher power, as immutable as the sun and the moon,” he wrote in 2018. His life’s mission was to put that myth to rest, which is why the story of Abed is the story of the triumph of hope over fate.

Scott MacMillan is the author of the Hope Over Fate: Fazle Hasan Abed and the Science of Ending Global Poverty (Rowman & Littlefield), from which this is adapted.
This excerpt is adapted by permission of the publisher. The book is available now from major retailers.

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World Faces Cascading Crises Causing Profound Suffering & Multiple Famines — Global Issues

  • Opinion by UN SG (united nations)
  • Inter Press Service

UNITED NATIONS, Jul 14 (IPS) – In his opening address to the 2022 Ministerial meeting of the High-Level Political Forum on the UN’s Sustainable Development Goals, July 13-15.Our world is in deep trouble – and so too are the Sustainable Development Goals (SDGs).

Time is running out. But there is still hope. Because we know what we need to do:

End the senseless, disastrous wars – now. Unleash a renewable energy revolution – now. Invest in people and build a new social contract – now.

And deliver a New Global Deal to rebalance power and financial resources and enable all developing countries to invest in the SDGs.

Let’s come together, starting today, with ambition, resolve and solidarity, to rescue the SDGs before it is too late.

We meet at a time of great uncertainty. The world faces cascading crises that are causing profound suffering today, and carry the seeds of dangerous inequality, instability and climate chaos tomorrow.

The ripple effects of Russia’s invasion of Ukraine have hit amid a fragile and uneven recovery from the COVID-19 pandemic, while the climate emergency is gathering pace.

Some countries are investing in recovery through a transition to renewable energy and sustainable development.

But others are unable to do so, because of deep-rooted structural challenges and inequalities, at global and national levels.

Some 94 countries, home to 1.6 billion people, face a perfect storm: dramatic increases in the price of food and energy, and a lack of access to finance.

And so there is a real risk of multiple famines this year. Next year could be even worse, if fertilizer shortages affect the harvests of staple crops, including rice.

The United Nations Global Crisis Response Group on Food, Energy and Finance has warned of the impacts of the current cost of living crisis and the future risks for next year.

Sixty per cent of workers today have lower real incomes than before the pandemic; developing countries are missing $1.2 trillion per year, just to fill the social protection gap; And sixty percent of developing economies are currently in, or at high risk of, debt distress.

Meanwhile, the number of people forced from their homes has risen to 100 million — the highest number since the creation of the United Nations.

The planet’s largest ecosystems – oceans and forests – are in danger. Biodiversity is declining at unprecedented rates.

Discrimination against women and girls continues in all sectors and all societies, while gender-based violence is at emergency levels. Attacks on women’s reproductive rights are reverberating around the world.

Implementing the Sustainable Development Goals will require $4.3 trillion USD per year — more money than ever before — because the international community is simply not keeping pace with the commitments it made;

In the face of these cascading crises, we are far from powerless. There is much we can do, and many concrete steps we can take, to turn things around.

I see four areas for immediate action.

First, recovery from the pandemic in every country.

We must ensure equitable global access to COVID-19 vaccines, therapies and tests. And now it is very important to have a serious effort to increase the number of countries that can produce vaccines, diagnostics, and other else technologies thinking about the future.

Governments must work together with the pharmaceutical industry and other stakeholders to share licenses and to provide technical and financial support to allow many other countries to produce vaccines and other medical important products.

Then we must redouble our efforts to make sure future outbreaks of disease are better managed by strengthening health systems and ensuring Universal Health Coverage.

Second, we need to tackle the food, energy and finance crisis.

Ukraine’s food production, and the food and fertilizer produced by Russia, must be brought back to world markets — despite the war.

We have been working hard on a plan to allow for the safe and secure exports of Ukrainian produced foods through the Black Sea and Russian foods and fertilizers to global markets.

I thank the governments involved for your continued cooperation.

But there can be no solution to today’s crises without a solution to the crisis of economic inequality in the developing world.

We need to make resources and fiscal space available to countries and communities, including Middle Income Countries, that have an even more limited financial toolbox than three years ago.

This requires global financial institutions to use all the instruments at their disposal, with flexibility and understanding.

Among other measures, they must consider raising access limits, re-channeling all unused Special Drawing Rights to countries in need, and reviving the Debt Service Suspension Initiative to provide immediate support to those in debt distress.

We should not forget that the majority of poor people do not live in the poorest countries; they live in Middle Income Countries.

If they don’t receive the support they need, the development prospects of heavily indebted Middle-Income Countries will be seriously compromised.

Looking ahead, we need a New Global Deal so that developing countries have a fair shot at building their own futures.

My report on Our Common Agenda calls for concerted efforts to rebalance power and resources through an operational debt relief and restructuring framework; lower borrowing costs for developing countries; and investment in long-term resilience over short-term profit.

The global financial system is failing the developing world.

Although since it was not designed to protect developing countries, perhaps it is more accurate to say the system is working as intended.

So, we need reform.

We need a system that works for the vulnerable, not just the powerful.

Third, we need to invest in people.

The pandemic has shown the devastating impacts of inequality within and between countries.

Time and again, it is the most vulnerable and marginalized who suffer most when crises hit.

It is time to prioritize investment in people; to build a new social contract, based on universal social protection; and to overhaul social support systems established in the aftermath of the Second World War.

Education is one critical example.

Any hope of solving the world’s challenges starts with education. But education today is racked by a crisis of equity, quality and relevance.

The Transforming Education Summit that I will convene in September is a platform for world leaders to recommit to education as a global public good; to chart a new vision for education systems fit for the future; and to mobilize support in order to move from vision to reality, especially in developing countries.

The Global Accelerator on Jobs and Social Protection for Just Transitions offers another critical entry point.

I urge all countries to make full use of this tool to reskill and retool their workforces for the economies of the future: powered by renewable energy and based on digital connectivity.

Fourth, we cannot delay ambitious climate action.

The battle to keep the 1.5 degree goal alive will be won or lost this decade.

While achieving this goal requires a reduction in global emissions of 45 percent below 2010 levels by 2030, current pledges would result in a 14 percent increase in emissions by that date.

This is collective suicide. We must change course.

Ending the global addiction to fossil fuels through a renewable energy revolution is priority number one.

I have been asking for no new coal plants and no more subsidies to fossil fuels because funding fossil fuels is delusional and funding renewable energy is rational.

Developed countries must make good on their $100 billion climate finance commitment to developing countries, starting this year.

Developing economies must have access to the resources and technology they need.

Half of all climate finance should go to adaptation. Everyone in climate- related high-risk areas should be covered by early warning systems within the next five years.

And we need to review access and eligibility frameworks for concessional finance, so that developing countries, including Middle Income Countries, can get the finance they need, when they need it.

The World Bank and the other international financial institutions must provide much more concessional funding, especially in relation to climate adaptation.

The High-level Political Forum is the place where the world comes together around solutions for sustainable development; for rebuilding differently and better; for achieving the SDGs.

We have the knowledge, the science and technologies and the financial resources to reverse the trajectories that have led us off course.

We have inspiring examples of transformative change.

In just over one year’s time, we will meet here for the 2023 SDG summit marking the halfway point between the adoption of the 2030 Agenda, and its target date.

Let’s do everything in our power to change course and build solid progress by then.

I wish you a successful meeting.

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Aid for Power in New Cold War — Global Issues

  • Opinion by Jomo Kwame Sundaram, Anis Chowdhury (sydney and kuala lumpur)
  • Inter Press Service

SYDNEY and KUALA LUMPUR, Jul 12 (IPS) – Long a means for powerful nations to influence developing countries, development finance has gained renewed significance in the new Cold War. Unlike during the US-Soviet Cold War, the rivalry now is between mixed market capitalist systems.

Development aid rivalry
After reneging repeatedly on development aid and climate finance promises, the G7 big rich nations dutifully lined up behind US President Biden’s Partnership for Global Infrastructure and Investment (PGII) at their 2022 Summit in Schloss Elmau, Germany.

Anis ChowdhuryWith a $200bn US commitment, the G7 promised to mobilize $600bn in public and private funds for infrastructure investments in developing countries to compete with China’s multitrillion dollar Belt and Road Initiative (BRI).

The White House denounces BRI, claiming the PGII offers “values driven, high-quality, and sustainable infrastructure”. Hence, G7 funding is more likely to have strings attached, e.g., taking sides in the new Cold War.

A Chinese foreign ministry spokesman emphasized, “China continues to welcome all initiatives to promote global infrastructure development”, but insisted China is “opposed to pushing forward geopolitical calculations under the pretext of infrastructure construction or smearing the Belt and Road Initiative”.

US national security priority
At the 2021 G7 Summit, Biden had unveiled a similar Build Back Better World (B3W) initiative, insisting it would define the G7 alternative to China’s BRI. Based on his domestic Build Back Better (BBB) programme, B3W was soon ‘dead in the water’ when the Senate rejected BBB.

The White House’s claim that with the B3W, the “United States is rallying the world’s democracies to deliver for our people, meet the world’s biggest challenges, and demonstrate our shared values” has also been dropped from PGII.

Jomo Kwame SundaramWith few B3W details forthcoming, the European Union (EU) launched its own Global Gateway for developing countries in December 2021, promising €300bn in infrastructure investments by 2027.

At the EU-African Union Summit in February 2022, the EU announced €150bn financing for the Africa-Europe Investment Package, half the Global Gateway budget.

EU leaders have touted their Global Gateway, suggesting G7 initiatives should be not only complementary, but also mutually reinforcing. But the EU’s African priority is not necessarily shared by other G7 members.

EU funding of €135bn will be from the European Fund for Sustainable Development. The UK Clean Green Initiative, from the 2021 Glasgow Climate Summit, and Japan’s $65bn for regional connectivity may also not be additional.

Acknowledging scepticism about how much is new money, German Chancellor Olaf Scholz urged G7 members to present their pledges consistently to allay doubts about double-counting and the low grants share viz loans.

When the PGII was announced to replace the B3W, it “created significant confusion”. Making clear its purpose, the White House unequivocally asserted PGII will “advance U.S. national security”.

Far-fetched, risky, conditional
The G7 also urges using public money to leverage private sector funds. But such initiatives have previously failed to mobilize significant private funding – hardly inspiring hope of meeting the trillion-dollar financing gap.

The Economist has found blended finance – mixing public, charitable and private money – “starry-eyed” and “struggling to take off”. Even the International Monetary Fund (IMF) and World Bank warn public-private partnerships (PPPs) incur contingent fiscal risks.

Worse, PPPs distort national priorities, favour private investors and worsen debt crises. They have also not improved equity of access, reduced poverty or enhanced sustainability.

Developing country debt crises typically involve commercial loans or private sector money. For example, the 1980s’ Latin American debt crises were triggered by US Fed interest rate hikes to kill inflation.

Private sector loans usually involve higher interest rates and shorter repayment periods than loans from governments and multilateral development banks. Unsurprisingly, they lack equitable restructuring or refinancing mechanisms.

Ignoring yet another UN resolution, powerful nations disregard developing countries’ appeals for fair and orderly multilateral sovereign debt restructuring arrangements. Similarly, the West refuses to fix unfair trade, tax and other rules disadvantaging poorer countries.

Trust deficit
Over half a century ago, rich nations promised 0.7% of their gross national income (GNI) as development aid. But total overseas development assistance (ODA) from rich Organization for Economic Development and Cooperation (OECD) members has barely exceeded half the promised amount.

Worse, the share has actually declined from 0.54% in 1961, with only five nations consistently meeting their 0.7% commitment in many years. Oxfam estimated 50 years of unkept promises meant a $5.7 trillion aid shortfall by 2020!

At the 2005 Gleneagles Summit, G7 leaders pledged to double their aid by 2010, earmarking $50bn yearly for Africa. But actual delivery has been woefully short, with no transparent reporting or accountability.

Most development aid is neither transparent nor predictable. After some earlier progress in untying, aid is increasingly being ‘tied’ again – requiring recipients to implement donor projects or to buy from donor country suppliers – compromising effectiveness.

The US ranked lowest among the G7, giving only 0.18% in 2021. To make things worse, US aid effectiveness is worst among the world’s 27 wealthiest nations. Clearly, besides aid volume shortfalls, quality is also at issue.

The Syrian refugee crisis and Covid-19 pandemic have provided some recent pretexts to cut aid. Some powerful countries have turned to ‘creative accounting’, e.g., counting refugee settlement and ‘peace-keeping’ military operations costs as ODA.

Unsurprisingly, the UN Deputy Secretary-General is “deeply troubled over recent decisions and proposals to markedly cut” ODA to service Ukraine war impacts on refugees.

Controversies over what climate finance is ‘new and additional’ to ODA have not been resolved since the 1992 adoption of the UN Framework Convention on Climate Change at the Rio Earth Summit.

G7 countries also fell far short of rich countries’ 2009 pledge to annually give $100bn in climate finance until 2020 to help developing countries adapt to and mitigate global warming.

The OECD’s reported $79.6bn in climate finance in 2019 was the highest ever. But OECD estimates are much disputed – e.g., for double counting and including non-concessional commercial loans, ‘rolled-over’ loans and private finance.

Cooperation, not conflict
Although China is new to development finance, it is now among the world’s biggest development financiers. Following broken promises and duplicity, even betrayal, China’s significance has increased as OECD donor funding declined relatively.

China is now a bigger player in international development finance than the world’s six major multilateral financial institutions together. Many developing countries have few options but to engage with, if not rely on, China.

Undoubtedly, there are justifiable concerns over China’s development finance and practices. These have included adverse environmental impacts, poor transparency and a high share of commercial loans – even if at concessional rates.

In 2019, IMF Managing Director Christine Lagarde suggested the new BRI phase would “benefit from increased transparency, open procurement with competitive bidding, and better risk assessment in project selection”.

Lagarde approved of China’s new debt sustainability framework and green investment principles to evaluate BRI projects. She expected “BRI 2.0 … will be guided by a spirit of collaboration, transparency, and a commitment to sustainability that will serve all of its members well, both today and tomorrow”.

The new Cold War may well spur more healthy and peaceful rivalry, inadvertently improving development aid and prospects for developing countries.

IPS UN Bureau


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© Inter Press Service (2022) — All Rights ReservedOriginal source: Inter Press Service



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